New crack down on Air BnB in NYC
 

NYC has just appointed a new official, with previous experience in shutting down chains of drug traffickers, with the aim of identifying and shutting down the worst offenders in terms of illegally subletting apartments short term (less than 30 days). This is not aimed at the individual who may on occasion rent out a room but at the landlords who are holding a large number of rent stabilized apartments off the market in order to make much higher illegal profits with Air BnB than they can with a legal rental. An official of Air BnB appeared before the city council to defend the business and was raked over the coals for refusing to cooperate with the city in identifying these landlords and defending their "rights" to run their business as they see fit.

The city council has made it clear that these landlords will be subject to fines ranging from $10K to $50K (for repeated infractions) and the city will now be assigning a task force to identify them and shut them down. If Air BnB does not cooperate with the investigation then it is anticipated that legal action will be taken against the company. For the moment the city is not anticipating action against individual subletters unless there are complaints from neighbors in their buildings - and in that case they are more interested in shutting them down rather than collecting large fines.

So - a warning to anyone looking to rent an apartment for less than 30 days in NYC: do NOT do so unless you have written confirmation that the rental is not illegal. And note that many of these landlords use official sounding rental companies - which will probably be the first to be found and shut down.

Is Uber a big success in New York? Why would anyone from out of town care about these rentals when they can save a whole lot of money?

They don't care. The city would be better served by partnering with Air BnB, as many have done with Uber, and regulating this new business model instead of attempting to shut it down.

Yes, Uber is a big success although there are negotiations ongoing now about how they will be subsumed under the control of the Taxi & Limousine commission so insurance and other safety issues can be dealt with.

As for Air BnB - there is a huge shortage of affordable apartments in NYC - and the landlords are breaking the law by renting to travelers - rather than local taxpayers - when they have accepted substantial tax abatements predicated on the basis that they rent these apartment on a stabilized long-term basis. If the landlords are willing to repay all of these tax abatements (which they have been accepting for many years) they are then allowed to rent them on a free market basis.

But they want to cheat the taxpayers by taking the tax abatements and then pulling the apartments off the market to use as illegal hotels. those are the people the new investigator will be identifying and suing to collect the large fines.

Please be aware that for reason like this "landlord" is a curse word in NYC.

Dukey1 - let's put it this way:

Say someone from out of town makes arrangements through AirBnb for a short term rental. And the City of NY cracks down on that particular location (owner etc) which the visitor is now in. The visitor has to get out right away and then has to sue the apartment owner (or AirBnb) to get their money back.

A municipality has the right (and obligation to its taxpayers) to regulate and license commerce. If you earn money from a commercial enterprise within NYC you are required to pay taxes.
This is why AirBnb and Uber are fighting the City Council.

Expect AirBnb and Uber to eventually lose.

Didn't New York already sue AirBnB once already a year or so ago?

That was just the beginning of the process. And, yes, Air BnB refused to provide the information the city wanted (the names of the landlords renting out large numbers of apartments.) They have been ordered to do so but are resistant and trying to negotiate The city council has now made it cler there is NO negotiation.

The city has a lot of issues to deal with and Air BnB is a fairly small one. But the appointment of an administrator, partly in response to a rising number of complaints from legitimate tenants (and in NYC tenants have a much stronger organization than almost anywhere else), and calling Air BnB before the city council are signs that this issue has climbed up the list.

The goal is to use the high fines to force the landlords to rent their stabilized apartments to legitimate long-term tenants - and although they will try to fight it, in the long term they can't win. Just too many people want Air BnB (and whoever else is renting these places) gone.

(I have a small example of this. My landlord had accepted the 421A tax rebates and then gone ahed and charged the tenants illegal rents. I tracked the rents of my apartment and filed suit in housing court. It took almost two years but the landlord had to give me more than $7K in free rent - which helped make a nice contribution to the $20K downpayment for my first co-op.)

So going forward any vacationer that rents from Air BnB is accepting a risk that the apartment may not be available when they get there.

nytraveler maybe you can explain how the rental system works. Son and dil are in a older, five story building, two apartments to a floor, no elevator, around 72 and West End. Older but nice apartment. They like the landlord and believe their rents is reasonable. Of the 10 apartments at least four are occupied by fairly elderly senior citizens. Over the past couple years a couple of these apartments have become vacant and then are extensively remodeled and occupied by younger tenants. Once the elderly residents leaves and it is remodeled is that apartment then bought up to the current market value.

There is a very complicated set of rules.

If the tenant has been in the apartment since before 1969 it is rent controlled, not stabilized. Rents are probably very low and can raise only in very small increments or if specific upgrades are made. Once the tenant leaves this apartment is no longer subject to rent control.

Then there are two options.

If the building was upgraded under a 421-A abatement the rent on the apartment would be stabilized. That is it would be market value for the initial tenant but additional leases would be as approved by the Rent Stabilization board - a few % the amount of which is decided upon each year.

However, it sounds like this building may not fall under 421-A, in which case the landlord can ask whatever he wants going forward for any tenant and rents are not controlled in any way.

And once any apartment reaches a legal rental of a certain amount - not sure what since we have a co-op but believe it is $2K to $2.5K per month - it comes out fro under stabilization.

(Naturally the landlord would have to update the vacant apartment since it is likely that the appliances, cabinets, flooring, etc may well date from the 1940s. Your son and DIL need to check out their lease to determine the apartment status - and can also look in city records to see if their apartment is stabilized or not - and if it is what the highest legal rent is.)

Note that signing a lease for an illegally high rent is NOT enforceable, but if you file with housing court it will usually take 3 or 4 years for your case to be heard. Often the landlords offer to settle for less to make the whole thing go away.

That is more than interesting. I know it was complicated. Just curious about how it all works. They have been there three years and paying around $2500 for one bedroom/bath. They actually like their landlord and he is fairly responsive to problems. It probably was rehab about 10 years ago so it is fairly nice but could use a little work. What they really like is the little outdoor patio that they have. What we dislike is the four flights of stairs. They are young we are not. For some reason three flights don't bother me but fourth one gets to me.

Affordable housing is a major issue in NYC, especially in Manhattan.

NY has added 30,000 hotel rooms in the last seven years and they expect a high in 2016 with 110,000. You see hotels cropping up every where also stealing housing.

The problem is unique to NY. 20% of the apartments in Manhattan are second homes to the wealthy from around the world and are often vacant. This creates ridiculous prices.

The NY Times every Sunday runs a feature about the most expensive residential property sold in Manhattan, that WEEK. Rarely does it fall below $13 million and very often it is over $30 million.

And who wants a parade of strangers on your floor? Would you?

<The problem is unique to NY.>
You have got to be kidding! It's the same in London, and Paris. Honestly, you New Yorkers...

Newbe-Try doing your homework before criticize. But that would hurt your narrative.

http://ny.curbed.com/archives/2014/1...sit_vacant.php

http://www.bloomberg.com/news/articl...rate-increases


In 2014, New York’s luxury real estate market saw prices jump 18.8 percent — the largest gain among world cities, according to Knight Frank. London’s luxury apartment prices grew by only 5.1 percent over the same period. And Hong Kong’s increased by a comparatively paltry 1.1 percent.

Why effing bother.

421-A usually comes into effect when the building is updated all at one time - that is, empty of tenants, gutted and rehabbed. It sounds like this is not the case with you son's apartment. I'm not an expert on this and don't know if 421-a ever applies to specific apartments versus a hole building. They would need to check. But in any case, if the legal rent is $2500 they are no longer under stabilization.

I'm not close enough to the rental market to say if this is a good deal. $2500 would usually be a very good rent for a larger 1 BR apartment, esp with any outdoor space - but being a 5th floor walk up is always going to lower the price.

If they are really interested in their rights they need to do some research in city records.

Thanks for the expanation nytraveler and IMDone, hope the city can get this under control.
I also live in a rent controlled apartment in a suburb governed by LA City, but since my place is not in a trendy or fashionable part of LA, am fortunate enough to not have the problems you describe of strangers traipsing in and out.

Thanks Jamie99.

There was a victory last week with the sale of something called Stuyvesant Town/Peter Cooper which is a complex with 11,000 apartments between 14th and 23rd St on the East Side which has been in default limbo. The new agreement calls for 5,000 apartments to set aside for affordable housing.

Usually the term "affordable housing" means housing for the poor. I'm waiting for affordable housing for middle income people. Yes, I live and was born and raised in NYC.

The rents in Stuy Town are for the middle class, rather than the poor. I guess the term affordable housing has changed a bit.

"Affordable housing" for the poor is limited to city housing projects - for which people have to qualify by income for a specific number of people - or not great private housing in parts of the outer boroughs. Most of the traditional areas for low income people (formerly Harlem, more recently Washing Heights) have been/are being gentrified by young people seeking anything affordable in Manhattan.

New/renovated affordable housing in NYC is for working/middle class people. As it stand hosts of city employees (teachers, cops, firemen, etc) as well as tons of private employees simply can't afford to live in Manhattan.